NIKE Inc. (NKE)
Update 3/28/2017: NKE gappd downward after publishing earnings and then in ensuing days gradually retraced more than half of the loss. I exited at my target of 25% of maximum potential profit.
Since I entered the position, shares have seen a net loss of 3.2%, or a -165% annual rate. The options position produced a 33.2% yield on debit for a +1,730% annual rate.
NKE publishes earnings on Tuesday after the closing bell.
I shall use the APR series of options, which trades for the last time 31 days hence, on April 21.
Implied volatility stands at 28%, which is 2.3 times the VIX, a measure of the volatility of the S&P 500 index.
NKE’s IV stands in the 54th percentile of its annual range and the 59th percentile of its most recent broad movement.
The price used for analysis was $58.33.
|NKE – iron fly||Strike||Odds||Delta|
The premium is 60% of the width of the position’s wings.
The risk/reward ratio is 0.8:1.
Decision for My Account
I have entered a position on NKE as described above. The stock at the time of entry was priced at $58.30.
By Tim Bovee, Portland, Oregon, March 21, 2017